Posted by Gemma Ospedale, Partner
Repeating restrictive covenant in undertaking
In Capgemini India Private Limited and another v Krishnan and others, the High Court has refused the employer’s application for an interim injunction where employees had given undertakings to observe a restrictive covenant which they subsequently tried to argue was in restraint of trade and unenforceable. In doing so, the Court considered the two conflicting public policy points: one of which was the effect of a restraint of trade, and the other was that the terms on which a dispute is settled should be respected. It took into account Court of Appeal guidance that the terms of an agreement to settle a dispute could nonetheless be challenged but considered it was not for the party who relied on the agreement to prove it was reasonable but for the party seeking to avoid it to prove the particular grounds that justified it being set aside.